India's benchmark Sensex scales 50,000 on recovery hopes, foreign inflows

  • Reuters
  • Stock Market News
India's benchmark Sensex scales 50,000 on recovery hopes, foreign inflows
Credit: © Reuters.

By Sethuraman N R

BENGALURU, Jan 21 (Reuters) - Indian shares rose to a record high on Thursday, with the benchmark Sensex scaling the 50,000 level for the first time, on hopes of an economic recovery and positive cues from the new Biden administration.

The blue-chip NSE Nifty 50 index .NSEI rose 0.6% to 14,735 and the S&P BSE Sensex .BSESN was up 0.62% at 50,102.28 by 0530 GMT.

The index was boosted by heavyweight Reliance Industries RELI.NS , whose shares rose 2.3% after Indian stock exchanges gave the go-ahead for a $3.4 billion deal with the Future Group.

Shares in Future Group companies jumped 5% on Thursday after the stock exchanges' nod. 13 of 50 bluechip Nifty stocks traded in the red, with HDFC Bank HDBK.NS being the major laggard, down 1.1%

Traders and analysts have been betting on an economic recovery and improved earnings from companies as India reopened its economy after a months-long lockdown, and foreign investors pumped more than $20 billion into Indian equities in December alone, according to Refinitiv Eikon data.

"The liquidity expansion by the central bank, the ample foreign institutional investors driven liquidity, a V-shaped recovery of growth aided by the discovery of vaccine and most recently the change of guard in U.S. have been some of the factors propelling markets higher," said Joseph Thomas, head of research at Emkay Wealth Management.

Global equity benchmarks hit record highs on Wednesday after U.S. President Joe Biden took charge. MKTS/GLOB

However, with the Nifty and Sensex hitting record highs over the past few weeks and combined with stretched valuations, many analysts have warned of a risk of correction.

Earlier this month, the Reserve Bank of India governor warned that a "disconnect between certain segments of financial markets and the real economy has been accentuating in recent times, both globally and in India."

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  • Rakesh Prasad @Rakesh Prasad
    Next 55000 by april and 60000 by december.
    Like 0

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